Business Context and Reporting Period
This Form 8-K, dated May 29, 2015, reports on Pure Snax International, Inc. (formerly B-Maven, Inc.), a Nevada corporation. The filing discloses a change in shell company status following the acquisition of an exclusive worldwide license to the business of Pure Snax Company, Inc. The company operates in the health foods and snacks industry, focusing on sugar-free, low-fat, and non-GMO products such as xylitol sweeteners, marshmallow squares, and popcorn. The filing includes Form 10 disclosure data covering the fiscal years ended June 30, 2013, and June 30, 2014.
Key Financial Metrics
| Metric | Fiscal Year Ended June 30, 2014 | Fiscal Year Ended June 30, 2013 |
|---|---|---|
| Revenue | $7,707 | $1,755 |
| Cost of Goods Sold | $924 | $318 |
| Gross Margin | $6,783 (88.0%) | $1,437 (81.9%) |
| Net Income/(Loss) | $(25,158) | $20,562 |
| Cash and Cash Equivalents | $0 | $0 |
| Working Capital Deficit | $(44,360) | Filing text does not provide a clear value |
| Accumulated Deficit | $(31,759) | Filing text does not provide a clear value |
Debt and Liquidity: As of June 30, 2014, the company had no cash. It owed approximately $4,979 in professional services and $619 in loans from unrelated parties. The company also had outstanding loans of approximately $40,000 from the former CEO (Mr. Cenia), with some due in September 2014. Subsequent to June 30, 2014, the company borrowed an additional $12,000 for working capital.
Material Changes and Corporate Actions
- Change in Shell Status: The company transitioned from a shell company to an operating entity by acquiring the exclusive worldwide license to Pure Snax Company, Inc.'s business and trademarks.
- Trademark License Agreement: On July 2, 2015, the company entered into a 10-year exclusive license agreement with Pure Snax Company, Inc. (Canada). The company must pay a 10% royalty on all net sales of licensed products.
- Name Change: On July 29, 2015, the company amended its Articles of Incorporation to change its name from B-Maven, Inc. to Pure Snax International, Inc.
- Leadership Change: On April 30, 2015, Patrick Gosselin acquired 7,500,000 shares (75% of outstanding stock) and was appointed Chairman, CEO, CFO, and sole director, replacing Restituto S. Cenia, Jr.
- Financial Performance: The company shifted from a net income of $20,562 in 2013 (driven by a one-time $55,638 gain on debt forgiveness) to a net loss of $25,158 in 2014 due to operating expenses and interest costs.
Outlook, Risks, and Management Commentary
Outlook and Strategy: Management plans to capitalize on new nutritional standards in U.S. schools and the growing demand for healthy snacks. The strategy involves gaining adoption in vending, schools, and mass retail markets where traditional snack companies face regulatory barriers. The company intends to finance future operations through the issuance of debt and equity securities, though no specific funding plan is currently in place.
Risks and Contingencies:
- Liquidity Risk: The company has no cash on hand and a working capital deficit. Its ability to continue as a going concern is dependent on obtaining adequate financing and achieving profitable operations.
- Operational Risk: The company has no employees and relies entirely on third-party contract manufacturers and suppliers. It has no long-term contracts with these parties, creating risks regarding supply chain stability, quality control, and pricing.
- Key Person Risk: The company is heavily dependent on CEO Patrick Gosselin, who owns 75% of the stock and performs all executive functions. There is no "key man" insurance.
- Regulatory Risk: Operations are subject to FDA regulations and evolving internet commerce laws. Non-compliance could result in penalties or cessation of activities.
- Stock Liquidity: The stock may be subject to "penny stock" regulations, which could limit the ability of shareholders to resell securities.
Investor Verification Checklist
- Verify the company's current cash position and ability to fund operations given the reported $0 cash balance and working capital deficit.
- Confirm the status of the $40,000+ in related-party loans and the terms of the new $12,000 borrowing.
- Review the specific terms of the Trademark License Agreement (Exhibit 10.1) to understand the 10% royalty obligation and exclusivity rights.
- Assess the company's progress in securing distribution contracts in the U.S., South Korea, and South America as outlined in the growth strategy.
- Investigate the reliance on third-party manufacturers and the lack of long-term supply contracts.
- Monitor the concentration of ownership (75% held by the CEO) and its impact on corporate governance and minority shareholder rights.